20181105notice_of_application_order_no_34180.pdf

Office of the Secretary
Service Date
November 5,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ANNUAL )CASE NO.IPC-E-18-13
COMPLIANCE FILING OF IDAHO )POWER COMPANY TO UPDATE THE )NOTICE OF APPLICATION
LOAD AND GAS FORECASTS IN THE )
INCREMENTAL COST INTEGRATED )NOTICE OF
RESOURCE PLAN AVOIDED COST )MODIFIED PROCEDURE
MODEL )
)ORDER NO.34180
On October 15,2018,Idaho Power Company filed its annual update to certain components
of its avoided cost rate calculation for qualifyingfacilities (QF)under the Public Utility Regulatory
Policies Act of 1978 (PURPA).Specifically,Idaho Power updated the load forecast,natural gas
forecast,and contract information components that it uses to calculate avoided cost rates under the
incremental cost Integrated Resource Plan (IRP)method,and asks the Commission to accept the
updated information for filing.Application at 1.With this Order,the Commission provides notice
of the Company's Application and notice that interested persons may file written comments about
the Application.
BACKGROUND
Under PURPA,electric utilities must purchase electric energy from QFs at rates approved
by the applicable state agency-in Idaho,this Commission.16 U.S.C.§824a-3;Idaho Power Co.
v.Idaho PUC,155 Idaho 780,780,316 P.3d 1278,1287 (2013).The purchase or "avoided cost"
rate shall not exceed the "'incremental cost'to the purchasing utility of power which,but for the
purchase of power from the QF,such utility would either generate itself or purchase from another
source."Order No.32697 at 7,citing Rosebud Enterprises v.Idaho PUC,128 Idaho 624,917
P.2d 781 (1996);18 C.F.R.§292.101(b)(6)(defining "avoided cost").
The Commission has established two methods of calculating avoided cost,depending on
the size of the QF project:(1)the surrogate avoided resource (SAR)method,and (2)the IRP
method.See Order No.32697 at 7-8.The Commission uses the SAR method to establish what
are commonly referred to as "published"avoided cost rates.Id Published rates are available for
wind and solar QFs!with a design capacity of up to 100 kilowatts (kW),and for QFs of all other
i See Order No.33785 (regarding battery storage facilities).
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resource types with a design capacity of up to 10 average megawatts (aMW).On the other hand,
if a QF's design capacity is above the published rate eligibilitycaps,the utility must use the IRP
method to negotiate a project-specific avoided cost rate with the QF.Id at 2;Order No.32176.
The IRP method accounts for "many different variables and produces a[n avoided cost]result
based on each individual utility's need for energy."Order No.32697 at 17.The IRP method's
variables are at issue here.
With respect to the IRP method,the Commission requires utilities to update fuel price
forecasts and load forecasts each year on October 15.Order No.32802 at 3.All other IRP method
variables and assumptions remain fixed between the biennial IRP filings.Order No.32697 at 22.
The Commission expects the utility's load and resource balance to account for long-term contract
commitments,and PURPA contracts that have terminated or expired.Id.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that,with this Application,Idaho Power updates its load
forecast,natural gas forecast,and contract information.The Company explains that the
information has been incorporated into its IRP avoided cost model and that it will use the model
to begin negotiating contractual avoided cost rates as of October 15,2018.Application at 2.
YOU ARE FURTHER NOTIFIED that Idaho Power's updated load forecast is from
October 2018 and "shows,on average,a decrease in its customer loads when compared to the
October 2017 load forecast that was provided to the Commission for the 2017 update in Case No.
IPC-E-17-15 and approved by the Commission in Order No.33957."Id at 2-3.Idaho Power
provides both the October 2017 and the October 2018 average annual load forecasts for years 2017
through 2036.Id at 3.
YOU ARE FURTHER NOTIFIED that Idaho Power's updated natural gas forecast is the
Energy Information Administration's (EIA)Natural Gas Henry Hub Spot Price:High Oil and Gas
Resource and Technology forecast,published on February 6,2018.Id at 4.Idaho Power uses the
same forecast,adjusted for pricing at Sumas and transport for Idaho City Gate delivery,in its 2018
IRP process.Id In the 2017 update,Idaho Power used the EIA Reference Case forecast for
Natural Gas HenryHub Spot Price.Id The Company explains that the 2018 forecast shows "a
decrease in the average annual natural gas prices over the remaining period"compared to the 2017
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forecast.Id at 4-5.Idaho Power provides both the 2017 and the 2018 forecasts for years 2018
through 2036.Id at 5.
YOU ARE FURTHER NOTIFIED that,regarding contract additions and terminations,
Idaho Power explains it has three non-PURPA,long-term power purchase agreements for 136
MW,and 134 PURPA QFs with 1,149 MW.The Companyalso has a new Oregon solar QF energy
sales agreement (ESA)for 3.00 MW,one new Idaho hydro QF ESA for 2.10 MW,and four
replacement ESAs for existing Idaho QF projects totaling 7.17 MW.Id Attachment 1.The
Company indicates it continuouslyincludes new ESAs,terminated or expired contracts,and new
complete ESA applications in its avoided cost IRP model.Id at 6.
YOU ARE FURTHER NOTIFIED that the Company's Application has been filed with the
Commission and is available for public inspection during regular business hours at the
Commission offices.The Application and attachments are also available on the Commission's
Website at www.puc.idaho.gov under "File Room"and then "Electric Cases."
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearingin this matter and will proceed under Modified Procedure
pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission's Rules of Procedure,
IDAPA 31.01.01.201-.204.The Commission notes that Modified Procedure and written
comments have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this filing
may file a written comment with the Commission no later than November 27,2018.The
comment must contain a statement of reasons supporting the comment.Persons desiring a hearing
must specifically request a hearing in their written comments.Written comments concerning this
filing may be mailed to the Commission and Idaho Power at the addresses reflected below:
Commission Secretary Donovan Walker
Idaho Public Utilities Commission Attorneyfor Idaho Power Company
PO Box 83720 Idaho Power Company
Boise,ID 83720-0074 1221 West Idaho Street (83702)
PO Box 70
Street Address for Express Mail:Boise,Idaho 83707
E-mail:[e-mail]
472 W.Washington Street
Boise,ID 83702-5918
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These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page located at www.puc.idaho.gov Click the "Case Comment or Question
Form"under the "Consumers"tab,and complete the form using the case number as it appears on
the front of this document.These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if any,no
later than December 4,2018.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set,the Commission will consider this matter on its merits and enter its Order
without a formal hearing.If written comments are received within the time limit set,the
Commission will consider them and,in its discretion,may set the same for formal hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant
to the Commission's jurisdiction under Title 61 of the Idaho Code,and specifically Idaho Code §
61-503.The Commission may enter any final Order consistent with its authorityunder Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000,et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure,Rules
201-204 (IDAPA 31.01.01.201-.204).Interested persons shall have until November 27,2018 to
file written comments.The Company shall have until December 4,2018 to file reply comments,
if any.
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DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of November 2018.
PAUL KJELLANDER RESSENT
KRISTINE RAPER,COMMISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
I \Legal\ELECTRIC\IPC-E-18-ITorder\JPCE1813 Ntc of App_ep docx
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